Forexpros – U.S. grain futures were mostly higher during European morning trade on Monday, with corn prices rebounding from the previous session’s 18-month low amid concerns over adverse weather conditions in the U.S. corn-belt region.
Elsewhere, wheat futures edged higher following Friday’s almost 5% plunge, while soybeans consolidated above the previous session’s seven-week low.
Agricultural commodities bucked a downward trend across most of the commodities complex, as fears over faltering U.S. economic growth, an escalating debt crisis in the euro zone and a deeper-than-expected slowdown in Chinese economic activity spooked investors.
Instead, grain traders returned to the market to seek cheap valuations following Friday’s sell-off.
On the Chicago Mercantile Exchange, corn futures for July delivery traded at USD5.6350 a bushel, surging 2%. It earlier rose by as much as 2.1% to trade at a session high of USD5.6363 a bushel.
Prices touched USD5.5138 a bushel on Friday, the lowest since December 3, 2010.
Corn prices regained strength amid concerns over dry and hot weather in key U.S. corn-growing regions. Agricultural meteorologists forecast less than an inch of rain in the coming days throughout most of the U.S. Midwest, potentially threatening yields and reducing the quality of the harvest.
Meanwhile, prices continued to find support below the USD6.00-level, amid speculation lower prices would encourage China to boost purchases of U.S. corn.
China’s state-owned grain-stockpiling agency, Sinograin, said last month that it was ready boost purchases to replenish depleted reserves if the prices are attractive.
China is expected to raise its 2012-13 corn imports to 6 million tonnes, up from the 2011-12 estimates of 5.5 million tonnes.
The U.S. produced 38% of the world’s corn last year, making it the both world’s largest corn producing nation and the largest exporter of the grain, while China is the world’s largest consumer of the grain.
Elsewhere, wheat for July delivery traded at USD6.1975 a bushel, climbing 1.2%. It earlier rose by as much as 1.3% to trade at a daily high of USD6.1988 a bushel.
Prices plunged nearly 5% on Friday to hit USD6.1125 a bushel, the lowest since May 16.
But the steep decline prompted investors to return to the market, amid speculation the recent decline in the grain had been overdone.
Wheat prices have been on the decline since touching an eight-month high of USD7.2138 on May 21, as technical selling and rains in parts of Russia and Australia eased crop concerns.
Australia is the world’s second-largest wheat shipper and Russia is the fourth-biggest in the 2012-2013 season, according to the U.S. Department of Agriculture.
Meanwhile, soybeans futures for July delivery traded at USD13.4538 a bushel, adding 0.15%. It earlier rose by as much as 0.25% to trade at a session high of USD13.5263 a bushel.
Prices fell to USD13.2688 a bushel on Friday, the lowest since March 8.
Soy prices are down nearly 11.5% since touching a four-year high of USD15.1237 a bushel on May 2, as hedge funds and large institutional investors unwound long positions to secure gains from an impressive 19% rally in the first five months of the year.
Market analysts expect an ever deeper drop heading into the summer, as the soy harvest in South America nears completion and higher prices eventually reduce the amount of Chinese purchases.
Corn is the biggest U.S. crop, valued at USD66.7 billion in 2010, followed by soybeans at USD38.9 billion, government figures show. Wheat was fourth at USD13 billion, behind hay.
Grain traders were looking forward to the U.S. Department of Agriculture’s weekly planting progress report after Monday’s closing bell on the CBOT.
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